Tribune's rating cut by S&P on concern over Cubs sale

Tribune Co., the newspaper publisher and broadcaster taken private by billionaire Sam Zell, had its debt rating cut two levels to CCC by Standard & Poor's, which said the Chicago Cubs may sell for less than anticipated.

The financing environment may limit bids or delay the sale of the Major League Baseball team, Wrigley Field and a stake in a television network, S&P said today in a statement. The rating is four levels above default.

Proceeds from the sale, earmarked to reduce Tribune's $11.8 billion in debt, may be ``significantly below'' the expectation of $1 billion or more and may not be received by year-end, S&P analyst Emile Courtney wrote in a statement. Yesterday, Chicago- based Tribune reported a third-quarter loss of $121.6 million. Sales fell 10 percent to $1.04 billion.

Tribune spokesman Gary Weitman declined to comment on the ratings change and speculation about the Cubs sale.

With newspaper and TV advertising revenue declining, Tribune may not garner enough cash from asset sales to avoid violating loan covenants, S&P said. The company's revenue may drop more than 10 percent this quarter and through 2009, while earnings before interest, taxes, depreciation and amortization may decline more than 30 percent, S&P said.

S&P has a negative outlook on Tribune's rating.